Northern Ireland’s biggest supermarket reiterated its commitment to continuing serving customers here.
It comes as an industry expert warned some supermarkets could leave if Brexit trade talks fail.
There are concerns some will initiate plans to withdraw from NI as early as next month if “meaningful clarity” does not emerge regarding the border.
Trade magazine The Grocer reported the concerns of Clive Black, a retail analyst at investment group Shore Capital, that if a deal is not agreed “we could have a crisis in the food industry in NI”.
While he believed supermarkets would tough it out if they thought there was the prospect of a suitable agreement, he said if new frictions were seen as permanent then businesses would “not sit around and pontificate”.
He explained: “There has been chatter about at least two supermarkets withdrawing from NI. If they did then I don’t think they’re going to hang around if it looks like the prevailing situation will last.”
Michael Bell, executive director of the Northern Ireland Food and Drink Association (NIFDA), told The Grocer that businesses in Northern Ireland would respond “very rapidly and very logically to economic signals” in the coming weeks.
But he warned that if the supermarket chains did make the call to pull out it would have a knock-on effect for other companies across the province and could undermine trade networks.
He said: “People tend to think of NI-GB trade as somehow completely separate to GB-NI trade. They are two sides of the same coin and they affect each other.”
Asked for a comment, a Tesco spokesperson said: “We remain committed to serving our customers in Northern Ireland and will continue to ensure that we can operate effectively for our customers, colleagues and suppliers.”
Talks over a trade deal with the EU remain in the balance amid a stand-off over the UK’s plans to override part of the Brexit withdrawal agreement.
Informal trade talks between the two sides are due to resume on Monday while the next official round of talks — the ninth since March — will begin in Brussels on September 28.
Prime Minister Boris Johnson’s proposed Internal Market Bill, which will be formally debated by MPs in the House of Commons for the first time on Monday, addresses the Northern Ireland Protocol — an element of the Brexit withdrawal agreement designed to prevent a hard border returning to the island of Ireland.
The new law would give UK ministers powers to modify or “disapply” rules relating to the movement of goods that will come into force from January 1, if the UK and EU are unable to strike a trade deal. The PM’s spokesman said it would also “ensure the government can always deliver on its commitments to the people of NI”.
Mr Johnson has previously said he would walk away from the negotiating table if an agreement with the EU is not reached by October 15.
A senior industry source told The Grocer that supermarkets have argued they cannot operate under the existing protocol without a special deal.
“We’ve watched the supermarkets trying to negotiate this for the past three months,” said the source, though they warned “what you can’t have is a situation where the government gives the supermarkets privileged access”.
They suggested that this could result in “disadvantaged parties” such as foodservice and convenience stores launching an appeal to the Competition & Markets Authority.
Aodhan Connolly, director at the Northern Ireland Retail Consortium, added: “If this is a negotiating tactic then unfortunately it just adds to the uncertainty of Northern Irish supermarkets.
“The Northern Ireland protocol is not perfect, but it averts some of the worst consequences of a chaotic non-negotiated outcome.”